Not-so-voluntary health insurance pooling bill subject of public hearing on March 7

(Feb. 29, 2008) Advocates of a state-run health insurance purchasing pool created in a new Connecticut Health Care Partnership (HB-5536) repeatedly say that the system would be voluntary for cities and towns and it would reduce costs.

Unfortunately, the bill will force many cities and towns to participate in the program — whether they want to or not — and could drive up municipal costs.

The bill will be the subject of a public hearing in the Labor Committee on Friday, March 7.

The general concept of the proposal is to have municipal employees, small employers and nonprofit organizations join the rich state employee health insurance plan.

Specifically, if municipal employees are covered under a collective bargaining agreement, then an arbitrator – not the local government — could decide whether they should join the state employee health plan. Thus the “voluntary” program would actually become mandatory in those situations.

This is troubling since the state has not done a particularly good job in containing its own health care costs — such as the $21.7 billion unfunded liability for state retiree health care costs and the fact that one state employee health plan for a family of four costs more than $21,000 a year.

Many cities and towns, on the other hand, have been able to better contain their health care expenses and have significantly lower costs than the state.

Affects municipal taxpayers
Forcing these municipalities into the state employee plan would increase their health care costs, which would negatively affect their property taxes. That’s a concern to the business community because taxpayers would then have to shoulder a heavier property tax burden.

Affects small businesses
Both the state and this pooling system would operate outside of Connecticut’s insurance laws — which would adversely affect many small businesses. In addition, any group participating in the program would have to make a three-year commitment.

Cost reductions suspect
Despite what proponents of the bill say, other large-scale purchasing pools have actually not addressed the high costs of health care. For example, America’s automobile industry has a very large health care purchasing pool, but despite its considerable “purchasing power,” the system’s cost has nearly toppled U.S. automakers.

First step towards government-run
Its advocates admit that a pooling system is merely a stepping stone for a future single-payer health care system. The impact of a single-payer system in Connecticut would be devastating to the state’s health insurance industry, placing tens of thousands of jobs at risk and striking a damaging blow to the economy.

For more information, contact CBIA’s Eric George at 860-244-1921 or eric.george@cbia.com.